All supply, no regulation: a housing solutions explainer

By Geordie Dent

The verdict is in: the Canadian housing bubble has officially popped. In the financialized markets like Toronto and Vancouver, thousands more units should come online in the near future leading to both a buyers market and increased rental supply. In theory, this should be good but the housing crisis remains.

“If a house is 300 [per cent] too expensive, and goes down by 20 [per cent], it still isn’t going to help you,” noted Carolyn Whitzman, a housing researcher and adjunct professor at the University of Toronto, in the Guardian last year. Even if you managed to buy into the market, you’re now facing much higher mortgage costs. This is forcing many homeowners living on the edge and the industries that employ those fueling the boom to go bust. Many renters, too, aren’t getting that much of a break.

Canadian housing policy, in the last few decades, has been largely focused on encouraging the private sector to develop supply. And for an equal number of decades, both supply and housing prices have exploded. More shoe box condos built than ever, priced higher for buying or renting than ever. 

As analysis by the Canadian Centre for Policy Alternatives shows, the emphasis on supply has not led to lower housing prices; in fact, quite the opposite. What governments pass off as a supply shortage, partially blamed on immigration, doesn’t reflect the mechanisms behind rising housing prices, unaffordability, and homelessness. 

Housing speculation is predicated on profit and profitability will always trump housing needs. When profits go down, corporations sit on assets, leaving them vacant, regardless of how many incentives or bailouts are thrown at them until it’s financially beneficial for them to re-enter the market. 

This piece unpacks some of the reasons stated to explain or solve the housing crisis and what the evidence suggests about their feasibility.  

More supply

Governments and traditional media keep telling us the housing crisis can be solved; we just need more housing. To do this, governments have created greater incentives for home ownership and constructed housing as an investment. First, a small number of property owners have gotten rich, some obscenely so. Second, the focus on supply has diverted attention from the main culprit causing our housing crisis: speculative demand.

To solve a fiscal deficit in the 1990s, the federal Liberal government axed most of the federal housing supply programs that had existed – however imperfectly – since the 1940s, transferring housing responsibility onto the provinces.

The neoliberal cuts to government programs coupled with financialization policies by way of low interest rates and the creation of real estate investment trusts – real estate holdings bundled together as shareholder investments – saw the federal government effectively turn housing construction and administration over to the private sector, both in market and non-market housing. 

Instead of a series of incentivized programs to help create a balanced mix of housing including ample market and non-market options, rental and ownership, the industry would be given free reign to build whatever they saw fit.

It’s taken some time for the numbers to filter out, but empirical data keeps showing supply solutions without state intervention to be useless. Study, after study, after study shows that in many cases a lot of supply was being added to various markets including those in Canada – but prices went up anyways.

“Building more units didn't solve the city's housing crisis,” Ren Thomas, an associate  professor at Dalhousie University, told CBC, looking at a recent CMHC analysis. 

Many units were being built, just shoe box condos, not the badly needed affordable ones and not where they are needed the most. The housing shortage is real – the North and First Nations reserves are among places where overcrowding is rampant – and there is a dearth of good quality, non-market housing in Canada. The Federal Housing Advocate’s 2025–2026 Annual Report states “for every 1 deeply affordable unit created, 15 are lost to financialization.”

But that is not the federal government’s priority. Federal housing minister Gregor Robertson summarized this position on his second day on the job in 2025. He was adamant: reducing costs was not on the table. "I think that we need to deliver more supply, make sure the market is stable," he said. Ensuring that developers could keep building and that no one lost money was his focus, not reducing costs for the consumer.

Zoning deregulation

Under the flashy moniker of “upzoning,” municipalities all across Canada (and elsewhere) are deregulating zoning requirements in areas with single-family homes. Low density, multi-unit housing has been identified as the missing middle of housing – in-between single-family detached homes and high-rises – and deregulation is meant to fast track this. A similar fight around rezoning has been happening for decades across Canada from various sectors of society arguing for reform: some based on planning and city design principles, others based on maximizing the value of land and giving greater control to private industry.  

While zoning reform can increase the development of housing, creating affordable housing is only usually possible with substantial state intervention. Countries such as France, New Zealand, and Japan, have passed zoning laws alongside a bespoke mix of non-market housing, mandatory affordable housing quotas enforced through fines, publicly owned housing units at rates far below market, rent control, and rent subsidies.

Combining zoning with state intervention would allow for mass building of the type of non-financialized housing that is desperately needed but, since the 1990s, Canadian governments have resisted strong state regulation at every turn and mass housing-as-infrastructure projects. As a result, the meagre bouts of zoning reform in Toronto, Edmonton, Vancouver, Quebec reducing municipal control over what gets built in cities hasn’t really gone anywhere. Simply changing zoning laws will not keep housing prices down – as demonstrated in Oregon – and, because the modus operandi of developers is to make money, no number of incentives will convince them to build affordable housing or any housing at all if there’s not a significant profit motive.

As writer and community advocate Laurence Braun-Woodbury puts it in his article on rezoning in Canadian Dimension, “Markets are good at putting up high-rent housing in high-return environments—and not much else.”

Less immigration

While the major culprits, the financialization of the housing crisis and the exploitation of foreign workers to keep wealth concentrated for a few, go unaddressed, governments turn to targeting immigrants.

“The story we are being told is simple supply and demand: there are more immigrants, they are buying and renting more, causing prices to go up, and the solution is to slash the number of newcomers,” Syed Hussan, executive director of Migrant Workers Alliance for Change, writes in The Breach in 2023.

Hussan breaks down five reasons why while there’s a definite link between immigration and vacancy levels, “one is not causing the crisis in the other”: 1) permanent resident rates have not jumped astronomically; 2) many permanent residents were already temporary residents – meaning they were already living in the country; 3) many newcomers come here temporary workers and the changes in workforces mean they make little impact on the housing market; 4) many migrants are poor and aren’t increasing housing demand but are themselves subject to the housing crisis; and 5) housing prices have inflated faster than the population has grown.

A study by the CCPA, as well, shows that the housing stock has been increasing per capita “from about 290 per thousand people in 1971 to 403 in 2023.” In light of this, Niko Block explains that the argument that an increase in housing supply will lead to greater housing affordability has not played out and that “policymakers cannot reasonably blame immigration for the long-term trend.”

To solve the purported housing shortage, the federal government has been bringing in temporary foreign workers to make up for labour shortages within housing construction and they now make up one fifth of these workers. Regardless, Mark Carney, after taking office, almost immediately implemented a conservative approach to immigration slashing permanent resident targets, temporary permits, and international students, partially arguing this would help address housing issues. 

Canada has created a situation where a large chunk of its GDP comes from housing speculation and maintaining the industry – and others – requires foreign workers. At the same time, these are the same workers scapegoated as the reason for the housing crisis. The impact of immigration to housing affordability is negligible when considered against the structural effort to turn housing into an investment opportunity for the private sector. 

But Canada is no stranger to effective housing policy.

Rent control

At the inception of the Second World War, to mitigate ballooning housing costs, the federal government took action. They implemented a national rent freeze, an eviction moratorium, and through their crown corporation, Wartime Housing Limited, created thousands of rental units.

Since the federal government’s pivot in the 1990s to give over housing responsibility to provinces and incentivize free market investment in housing, the teeth have been taken out of calls for rent freezes – excepting a brief moment when COVID-19 first came on the scene. Now, as many tenant groups call for crumbs in the way of rent control, it still faces massive outcry from developers and governments. 

The biggest arguments against rent control for the last few decades have been that it’ll disincentivize developers from building which will lead to a lack of housing supply and therefore, greater unaffordability. Provinces such as Alberta, Saskatchewan, New Brunswick, Newfoundland and Labrador, the Northwest Territories, and Nunavut have no rent control. 

Multiple analyses, including from CMHC, show rent control has little impact on housing construction. When Ontario expanded rent control in 2017, landlord advocates pushed hard against it at the time with an op-ed in the Toronto Star. The result was actually 3.5 times more applications to build new units. 

Additionally, in provinces with some semblance of rent control, such as B.C. and Ontario, rental prices have still skyrocketed as developers find ways to evade regulation using whatever loopholes they can (own-use clauses and renovictions) and lack of regulation elsewhere (vacancy control).

But gutting rent control benefits industry profits. So Doug Ford got rid of it for new builds in 2018 in Ontario, while it’s been hampered in Quebec, resisted in B.C., and attacked in P.E.I. 

Ontario and Quebec also allow landlords to propose above-guideline rent increases. While tenants supposedly have the ability to negotiate these – through the Landlord and Tenant Board in Ontario and the Tribunal Administratif du Logement in Quebec – this isn’t guaranteed, individualizes systemic issues, and doesn’t factor in the risk to tenants of having to put their housing in precarity because of the inherent power differential between themselves and their landlords.

In the Second World War, the federal government solved for this through the creation of public housing. 

Since offloading responsibility onto the provinces, however, there has been little public housing created, keeping renters at the whims of the free market without any safety net.

Governments rarely make decisions out of benevolence. This was true in the Second World War where rent freezes, eviction moratoriums, and public housing were hard won through tenant and labour organizing and it’s true today as tenants in Toronto have shown through massive, successful rent strikes.

Vacancy control

Vacancy control, another regulation intensely resisted by landlords, is a strong type of rent control that limits how much a landlord can raise rents between tenants. 

A lack of vacancy control means that new tenants need to outbid each other to get a place, pushing prices up and drastically reducing the effectiveness of annual rental caps. It also creates an incentive for landlords to illegally evict older, sitting tenants to defraud them of their cheap rental contract and replace it with demand from new tenants willing to pay more. As CCPA reports, Metro Vancouver saw average rents skyrocket 50% within a decade, despite B.C.’s annual rent caps.

Ontario and B.C. used to have vacancy control. Quebec, Manitoba, and P.E.I. all have some form of vacancy control and Quebec has historically had both lower rent and higher rental housing development than most other provinces.

The end of the Second World War came with hundreds of thousands of returning veterans, housing supply shortages, substandard housing, and overcrowding. The media covered the housing crisis at length, with cities like Toronto taking out ads telling people not to “come to Toronto for housing accommodation.”

Like today, the public demanded action in response. The government ramped up housing construction by starting to fund housing like it funds other infrastructure: roads, schools, hospitals, pipes, our electricity grid, etc. Today, though, governments remain hands off, allowing tenants, especially those who are low-income, to continue to be subject to rent gouging by landlords.

Affordable housing

The government can return to its proven strategy of the 1950s to build public housing and combine it with strict regulations but what they’re choosing to do over and over is to incentivize the free market to build even when it’s counterproductive to profits by subsidizing costs for developers.

The federal government’s passing of the Improving Housing Supply Act aims to, once again, boost supply; this time by providing provinces and territories with $1.47 billion in funding. In B.C., this will be used to buy up sinking condo stock and sell it as part of a rent-to-own program (one not to be implemented in Vancouver proper) instead of turning it into subsidized or non-market housing. Ontario has announced it’ll use its funds to provide tax relief for new homebuyers. No meaningful action will be taken for renters as governments continue to push forward on largely non-interventionist solutions that’ll ultimately benefit developers the most. 

And we only need to look to the real estate industry to clearly see where their priorities lie. In response to the CCPA’s analysis of the housing crisis being caused by financialization and not a supply shortage, one multiplex company co-founder wrote, “The CCPA study is a wake-up call for policymakers. But for investors, the data tells a different story — one of opportunity.”

As economist HR Sodeifi wrote for Midnight Sun Magazine, “Investors [...] aren’t concerned with a home’s use value. Investors view a home as a commodity, a potential source of profit and/or income flow. They care little about the schools nearby, the community, local parks, and quality of life. They are interested only in the exchange value of the house: how much profit they can generate from their investment, either through rents or resale.”

The housing bubble may have popped but much has not materially changed for the better for most people, renters or otherwise.

One way to take the financialization out of housing under a capitalist system is to build national housing. The only other way is to rethink the entire system of land and housing speculation and fight to decommodify housing.